The following are a list of events that are likely to occur in 2011 in my view:
1) Ireland repudiates the austerity budget of Mr. Cowen and Mr. Lenihan after the 2011 elections.
2) Irish rejection of austerity measures after already receiving approval for the 85 billion Euro bailout from the IMF which triggers fear in stock markets and increased volatility.
3) A stock market collapse begins on or about March 18, 2011 and continues for months. As readers may recall from a previous post, global stocks currently have a value of $51 trillion.
4) A spike in gold bullion prices coinciding with the March stock market correction.
5) Bond market yields in Europe (Ireland, Greece, Portugal, Spain, Italy, Belgium) continue to rise as the risk of default grows.
6) France begins to have difficulty selling its bonds as fiscal problems grow.
7) Bond auction failures appear in Europe and Asia. As readers may recall, the bond market is much larger than the size of the stock market. It plays the key role in my 2011 collapse forecast.
8) As the bond market begins to stumble, money flows out of commodities with crude oil dropping below $60 and copper also falling.
9) The US dollar index rises significantly reaching our target of 92.
10) The Canadian dollar drops against its US counterpart and heads toward 90 cents.
11) The Euro enters a currency crisis as sovereign debt of peripheral states weighs on the viability of the union.
12) Several American municipalities file for bankruptcy. Next year, in 2012, we will likely see the first state bankruptcies.
13) American banks take serious capital hits from the European crisis and the continuing problems in the domestic residential and commercial loan markets.
14) The high US dollar negatively impacts exports as they become too expensive for Europe and emerging markets.
15) Deflation grips the US as GDP grows slows to a crawl and then goes negative, prompting consumers to save even more.
16) Inflation in China causes further interest rate increases which combined with a strengthening Yuan push China toward a hard landing.
17) Globalization begins to unravel as trade drops off significantly.
18) Hot money flows out of the stock markets and bond markets with a giant move into gold just a Exter's inverse liquidity pyramid suggests.
79 days to March 18, 2011